Execs to B-Schools: Your M.B.A.'s Don't Have What It Takes to Succeed

C-suite executives are giving failing marks to business schools for not producing quality M.B.A.'s. Digging into the criticism yields plenty of hiring tips for startups.

It takes a combination of strong backbone and bravery to ask people what they think of what you do. Particularly if they're going to be candid and blunt.

That's exactly what happened with a recent study by the Hult International Business School. The survey asked 90 globally diverse business leaders about the state of business education--a big source of professional managers. The results were harsh: 44 percent had a negative view, 23 percent were mixed or neutral, and only a third were positive. Mind you, many of these leaders were probably the partial product of business schools.

Well, there goes the silver-bullet answer to management. The big beef was that the schools don't adequately prepare students for the modern workplace. The problem has three parts:

Schools don't measure if students learn relevant skills and behaviors. A single number, like a GPA, doesn't say nearly enough about what students have learned. Ironically, a high grade point average was often associated with a perception that students took easier courses, meaning they were risk averse and did not have the flexibility and agility companies need.

There isn't enough emphasis on 10 critical skills and abilities. Self-awareness of strengths and weaknesses, integrity, understanding of cross-cultural reality, team skills, critical thinking, communication, comfort with inevitable ambiguity and uncertainty, creativity, the ability to execute tasks when first joining an organization, and strong sales skills, including the ability to persuade and influence others, were all sorely lacking in the graduates.

Schools overemphasize theory. The emphasis means less time for students to apply what they have learned. It would be better for them to work more in simulated business situations or with professionals who could provide some real-world perspective and advice. As it is, many business professors do some consulting but haven't actually run businesses themselves.

As the report said, "Collectively, these findings signal a business school industry in danger of becoming out of step, unless those schools make significant changes." Actually, it sounds as though many schools are already out of step and have been for some time. Getting this amount of negative reaction doesn't happen overnight and isn't the result of disappointment with a handful of graduates. The reaction is also coming from some major sources, such as Accenture, Unilever, and Liberty Mutual Insurance.

The study does have its limitations. It could have been bigger, for example, and was originally supposed to include interviews with 200 leaders. But the researchers kept getting the same answers over and over again, according to the The Wall Street Journal.

"We were just hearing the same thing again and again. There was really no point in continuing the research much further," says Hult President Stephen Hodges. He added that he was surprised by the consistency of those negative sentiments.

Talk about concentrated rejection. Who could blame them for calling it a day?

The Takeaways

The news shouldn't be so startling. Over many years, I've heard people question what M.B.A.'s actually knew--particularly when talking about newly minted business consultants who would then tell experienced executives how they should run their corporations.

There has also been other criticism from within the academic community, like from Garth Saloner, dean of Stanford University's Graduate School of Business. "What [employers] really tell us they need are leadership skills," he told the McKinsey Quarterly. "It's what you might think of as 'soft skills,' or people skills. Those are the things that are in short supply in managers who [employers] want to rise to the most important and significant ranks in their companies."

What is the lesson from all this for an entrepreneur? When building out your management team, don't get dazzled by the M.B.A. or GPA. Look deeper into the person you're considering for employment. Ask whether he or she might grasp the dynamics of a multicultural market, or has ever exhibited creativity. What evidence is there that the person is good in a team or can demonstrate critical thinking for a real-world problem? Was there a time when the candidate can remember wrestling with an ethical challenge?

Do your interviewing and evaluation correctly, and you might land a higher-quality management employee than your competitors--or, apparently, than giants in your industry.